Does the protection of foreign intellectual property rights stimulate innovation in the US?

Larry D. QIU*, Huayang YU

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)

9 Citations (Scopus)

Abstract

Although standard theories suggest that patent protection helps stimulate innovative activities, some new theories argue the opposite. Empirical studies do not generate conclusive results either. This paper investigates empirically the impacts of foreign patent reforms on innovation in the US, using data on successful patent applications in the US over 33 years and major IPR reforms in 21 countries, in addition to the patent reforms in the US and the TRIPS Agreement of the WTO. We find that the TRIPS Agreement has had significant impacts on innovation in the US, which highlights the importance of international cooperation in patent protection. However, the effects of strengthening patent protection by individual countries are not statistically significant. This result seems to imply that the US market is already sufficiently large/profitable to provide innovation incentives in the US and therefore further strengthening foreign patent protection simply increases the US innovators' rent, but not their innovation.

Original languageEnglish
Pages (from-to)882-895
Number of pages14
JournalReview of International Economics
Volume18
Issue number5
Early online date29 Oct 2010
DOIs
Publication statusPublished - Nov 2010
Externally publishedYes

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Bibliographical note

Financial support from University of Hong Kong (Seed Funding Pro-gramme for Basic Research).

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